Bankruptcy and Retirement Accounts

What happens to your 401(k) & retirement accounts when filing for bankruptcy in New York City

The purpose of personal bankruptcy is to give you a fresh start by discharging most of your debts. While some debts are not dischargeable, such as student loans, alimony, and child support, most debts are wiped away in bankruptcy.

If you have retirement accounts, the question becomes whether these accounts must be liquidated to pay creditors.

Are retirement accounts protected from creditors?

Pensions and 401(k) plans are generally administered by an employer for the future benefit of the employee and they are set up in such a way as to be protected from creditors. Thus, with one exception, these accounts do not become part of the bankruptcy estate and are not subject to liquidation to pay creditors.

The exception is a retirement account set up for a self-employed individual. This account may be subject to liquidation, so if you are self-employed you should seek legal advice before filing for bankruptcy.

Individual retirement accounts (IRAs)

Similar to retirement accounts of self-employed individuals, IRAs are also subject to liquidation and become part of the bankruptcy estate. One way to protect part of your IRA is to claim it as exempt property. For example, if you claim federal exemptions instead of New York exemptions, you can exclude $1,150 plus up to $10,825 of any unused portion of your homestead exemption to exempt your IRA funds from the bankruptcy estate.

Meet with an experienced NY attorney to discuss your IRA, pension, or 401(k) and bankruptcy

If you live in New York City and think bankruptcy may be a viable option for you, contact the Law Office of Gregory Messer online or at 718-717-2368 to schedule a free initial consultation. Our office is located across the street from the U.S. District Bankruptcy Court in Brooklyn and is close to the Borough Hall and Court Street subway stations. We serve residents throughout Brooklyn, Bronx, Manhattan, Staten Island and Long Island.

To ensure every client’s filing receives the attention it deserves, we are an appointment-only law firm with flexible hours adjustable to fit your needs.

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Attorney Messer

The Law Office of Gregory Messer provides a wide range of services for individuals and families suffering from the weight of excessive debt. Read More »

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This office works overtime at helping people with their legal situations. Highly recommended!!!

I went to see Mr. Messer in regard to some issues I was facing. He was very patient and helpful. When I consulted him with my questions I was given prompt responses via email and/or phone. I would definitely refer my family and friends to him.

Great Attorney !!!!!!! Mr. Messer took his time with me and thoroughly explained to me what needed to be done to resolve my situation and he took care of it for me . I was very happy with him and his staff. I would happily refer him to others.

Helping consumers make healthy financial choices Is Bankruptcy Right for You? The Law Office of Gregory Messer provides a wide range of services for individuals and families suffering from the weight of excessive debt. Attorney Gregory Messer personally works with you to set your mind at ease and relieve the strain financial woes have placed on your personal and professional lives. Deciding to file for bankruptcy can be difficult and scary, and our law firm is here to help make the process as easy as possible for you. While our courteous, knowledgeable staff members are available to answer any questions you may have, you spend the majority of your time dealing directly with Mr. Messer - a well-known, highly esteemed lawyer. An exclusive focus on bankruptcy law Gregory Messer can help you determine whether bankruptcy is right for you and, if so, what form is best to file. He has more than 30 years of experience representing debtors in: Chapter 7 bankruptcy Chapter 13 bankruptcy Mr. Messer also handles Chapter 11 bankruptcy filings, debt consolidation procedures, and an array of other bankruptcy-related issues. Accolades Mr. Messer has received extensive recognition over the course of his legal career for his diligent, ethical nature. A panel trustee for the Chapter 7 Trustee Panel for the Eastern and Southern districts of New York since 1980; he became Board Certified in Consumer Bankruptcy Law by the American Board of Certification in 1995. He is listed in Super Lawyers and the Bar Register of Preeminent Lawyers™ and is AV® Preeminent™ Peer Review RatedSM by Martindale-Hubbell®. Additionally, he has received multiple awards for service to those in need in the Brooklyn community. Comprehensive service from qualified counsel Reach out to the Law Office of Gregory Messer online or at 718-619-8282 to schedule a free initial consultation. Our office is located across the street from the U.S. District Bankruptcy Court in Brooklyn and is close to the Borough Hall and Court Street subway stations. We serve residents throughout New York City and Long Island. To ensure every client's filing receives the attention it deserves, we are an appointment-only law firm with flexible hours adjustable to fit your needs.

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